If you would like greater assurance about the reliability of your figures, but you’re not required by law to have an audit carried out, then a financial statements review is the answer. Just as with an audit, an auditor carrying out a review engagement considers whether the financial statements are a true reflection of the organisation’s financial situation. Because the auditor doesn’t have to do as much work, the review doesn’t produce the same level of assurance as an audit does. A review engagement is perfect for companies that require a certain, limited degree of assurance, but are not obliged by law to undergo a statutory audit.
Being properly prepared for the audit
Experience has taught us that a review engagement is a good way to prepare a company for a future audit engagement. Our auditor will present you with risk and financial analyses, and will also assess the internal controls at your company. You can use all this information to tackle issues that need addressing in good time. Feel free to contact us, and we’ll explain how we can help you in this respect.
What does a financial statements review involve?
Because the review work done for a review engagement is less in-depth than in an audit, the level of assurance is not as high. It goes without saying that the auditor is expected to take the same professional and critical approach to the process. This is reflected in the statement in the review report that ‘there is no evidence that the financial statements do not give a true and fair view of the company’s assets and profit or loss’.
The work that an auditor carries out in a review engagement consists of:
a risk assessment (what can go wrong?) based on knowledge of your organisation and the environment in which your organisation operates;
carrying out analytical procedures.